Already a Bloomberg.com user?
Sign in with the same account.
According to results from a new survey by the New Talent Management Network, 45% of companies will boost spending this year on talent management. An increased focus on this emerging HR discipline reflects companies' increased concern with risk management, cost management, and change management.
"Business leaders in every industry are really drilling down inside the enterprise looking for cracks in process, systems, and resources that are hurting performance," says Marc Effron, NTMN founder and co-author of the survey. "As they do, they're seeing the talent gaps and the potential for more effectively managing and building their key talent."
That view hails from an exclusive look at results from the third annual State of Talent Management survey conducted by NTMN, whose 1,800 members represent the world's largest global network of talent management professionals.
Additional spending on talent management—which increasingly clusters functions such as leader assessment, development planning, workforce engagement, executive coaching, identification of high-potential employees, and talent strategy—won't translate into an immediate surge in new hiring. Only 17% of survey respondents (126 companies, mostly headquartered in the U.S., with average revenue of $4 billion) expect to expand their workforces in 2010.
Companies that aren't planning to increase headcount are poised to spend more on such programs as enrolling more people in executive education and coaching programs, adding new talent management technology, and conducting more workforce engagement surveys. Many of these, Effron says, were shelved when the economy—and corporate HR budgets—first started to tighten.
Despite the fact that only 29% of survey respondents are concerned that key business performers will leave their companies this year, 70% believe the increasing competition for exceptional leaders will challenge their companies' ability to hire top talent in 2010.
"We're at a bit of an inflection point. All the data say that senior executives are pretty serious about talent and that they understand the need for investment and their personal attention," Effron says. But he points out that many companies that have made financial investments in such things as 360-degree leader assessment or structured programs for "high potential" employees haven't effectively measured the ROI or integrated them within a unified talent management function.
The survey results show that a formal talent-management group charged with driving specific workforce improvements within human resources can increase effectiveness in a few critical areas, such as setting clear performance goals, conducting workforce analyses of strengths, and building "high potential" talent streams. Key to maximizing effectiveness is streamlining the processes, according to Effron.
"Business leaders want the simplest way to get the job done," he says. "They need to push talent leaders to bring them simpler practices that address what the business truly needs, without the bells and whistles and HR bureaucracy we may add on."
NTMN expects to release its full report, also co-authored by Richard S. Wellins, PhD, a senior vice-president at Development Dimensions International, later this month through its Web site.
Looking ahead, slightly more (46%) of corporate Talent Management leaders believe their programs will be reinstated this year, compared with 42% who expect those budgets and net workforce gains to remain near 2009 levels.
"The amount of personal attention that senior business leaders are devoting to their most critical employees should have a very positive impact on the quality and performance of people in key roles," Effron says. "It's up to Talent Management to maintain that focus on creating a better talent engine that gives the business a competitive edge."